Tax Season: Why I loathe paying taxes since moving to CA from the UK

Since moving to the UK I&#x27;ve wanted to do a breakdown of taxes I paid in Colorado vs UK. Even though taxes are higher here and VAT is 20% I&#x27;m still convinced I have more income at the end of the year then I would in CO.<p>Some things I&#x27;ve noticed -<p><pre><code> I surrendered a good chunk of my paycheck to health insurance in the states that&#x27;s already folded into income tax in UK Car insurance in UK is much cheaper because it only needs to cover damage to the car instead of hospital bills Council tax (property tax) is significantly cheaper here. For instance, a £1,000,000 home in manchester might pay £2200-£2700 per year in council tax, while a $1,000,000 home in my old neighborhood in Denver is paying $6000 per year Gasoline is more expensive here, but driving distances are not as high so I think that washes out even Fruit, vegetables and meat is definitely cheaper here then anywhere in CO Internet, cable, and phone plans are significantly cheaper here</code></pre>

California may be high tax for high income people, but for most middle and low income folks, it is actually pretty cheap. CA&#x27;s top marginal income tax rate is actually a temporary provision which may or may not be extended when it expires, depending on who the voters elect.<p>&gt; driving away the 1% of households that pay 50% of the taxes in California, worsening the situation for everyone.<p>One big problem is that over the decades the economy has shifted more to services and less to sales of physical goods, so sales tax revenue has declined disproportionately. We should have a sales tax on services to offset reductions in income tax, which would be much better for creating steady revenue.<p>&gt;this is the only place we’ve lived where it would add an additional $2,000+&#x2F;month expense to keep our family’s healthcare while unemployed.<p>That&#x27;s inaccurate. If your income is low, you can get subsidized coverage through Affordable Care Act (aka Obamacare), up to 100%.<p>&gt;government retirement plans like 401(k)s<p>401k is not a &quot;government plan&quot;, it is an employer-sponsored plan. There is no &quot;retirement age&quot; associated with a 401k or an IRA, for that matter. You are making a pretty big mistake here by not maxing out your available opportunities to defer taxes. The tax you pay when you retire on such contributions is based on where you live at the time, not where you lived when you earned the money.<p>&gt;Lastly, we won’t allow ourselves to be audited without our knowledge by the IRS by using a cloud-based personal finance app that could be subpoenaed behind our backs if they continue pushing for new powers.<p>Paranoid maybe? Audits are a necessary component of our voluntary reporting system, and you have nothing to fear if you pay what you legitimately owe. You will absolutely be notified if you are being audited, and get a chance to provide accurate information. <i>Far</i> more people cheat on their taxes than are unfairly dunned by the IRS.

As a Brit this article is laughable. People are literally dying in the UK because so called wonderful &#x27;free&#x27; public healthcare doesn&#x27;t have the ambulances to send to them. Tons of potholes everywhere too. Outside London and major cities, public transport is non-existent to very poor.

I have sympathy with the premise but unfortunately quotes like this completely undermine the reliability of the analysis:<p><i>World-class public transport, never needed a car in London</i><p>The idea that UK public transport is world class is absurd.<p>The author is doing <i>extreme</i> cherry picking by referring to the entirely unrepresentative London transport infrastructure and service.<p>Try living in a rural area or many urban areas, especially in the north, and talk about &quot;world class&quot; public transport to people there.

Great idea to compare &quot;what you pay&quot; vs &quot;what you get&quot; between countries. I&#x27;d love to see further analysis downstream: How much revenue per capita each country collects, and how it&#x27;s allocated. (IIRC, the conventional wisdom is that wealthy Americans are good at legally avoiding taxes, and a disproportionate amount of America&#x27;s tax money goes to an outsized military and a cost-ineffective healthcare system.)

CA taxes get you the privilege to say you&#x27;re progressive, and that you&#x27;re not like that other guy. For everything else, use your Mastercard.<p>We&#x27;ve been spending some time in Turkey since the pandemic and despite all the corruption, we experienced clean streets (swept daily, hardly rocket science), rebuilt roads, rebuilt sidewalks, new bike lanes, maintained gardens&#x2F;parks, improved broadband, virtually no homelessness. They even tried cleaning the temporary sea snot problem, which seemed a bit like trying to boil the ocean. But A for effort, I thought.<p>I love CA but also quite heart broken that in over a decade, I&#x27;ve watched San Francisco get more and more expensive, with taxes also going up, and homelessness get more and more prevalent, only to find out that in 2019 they were not letting homeless people with drug issues or dogs in shelters, and complaining about how homeless people &quot;don&#x27;t wanna go to the shelters.&quot; Well, have the operators not seen a single homeless person? I bet having a dog and drug issues is the greatest predictor of homelessness. So the homeless shelter is basically a shelter that doesn&#x27;t allow any homeless in.

The tax table only focuses on income tax, but the UK derives a substantial portion of its national budget from VAT, which the US lacks (yes, I know about sales tax — not the same in rates or effect).<p>This does not consider costs. Example: US spends more per person on Medicare and Medicaid than the UK spends per person on NHS. Medicare and Medicaid are not exactly known for lavish spending.<p>Many expensive services are labor intensive and labor costs more. Other costs are driven by political factors — which are not caused by corporate interest but are instead wildly popular with voters (example: NIMBY-ism, Prop 13).<p>Even the dreaded tax filing business exists because there is a substantial political base that hates taxes — and having an awful and infuriating UI&#x2F;UX to the tax system makes people hate taxes more. The fact that you have to fill out all those forms is a feature, not a bug.

The author makes several really good points about how so much of our taxes that are levied and paid in good faith go towards enriching already-rich entities (healthcare, universities, the defense industry).<p>It&#x27;s disappointing that the take-away is &quot;join me in having a better way to avoid paying your taxes.&quot;

I agreed with the overwhelming majority of this article.<p>However one serious ommision is the fact that NO ONE who makes $650,000&#x2F;yr pays $295,000 in income taxes in the US.<p>That byzantine tax structure is basically in place to insure this.<p>Personally, I&#x27;m a lefty, and I will be the first in line to say that the government of California is massively corrupt. Government is a monopoly, and as such it needs major public review and restrictions in place to prevent corruption. We don&#x27;t have those review processes, and we don&#x27;t have those restrictions.<p>A message to the author: If you think you&#x27;re getting a bad deal for your taxes in California, try out a red state for size, where you get basically nothing for your tax dollars.

Also there is no law preventing publicly funded ambulances. The reason they do not exist in some places is because voters (and this is local voters, as police&#x2F;fire funding is very local) <i>have chosen not to raise taxes to pay for it</i>.<p>This is an understandable decision because running an ambulance service is expensive and cities&#x2F;counties would rather have someone else pay for at least a part of it. Here is a nice explanation from the City of Long Beach: <a href="https:&#x2F;&#x2F;www.longbeach.gov&#x2F;finance&#x2F;services-and-permits&#x2F;ambulance-services&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.longbeach.gov&#x2F;finance&#x2F;services-and-permits&#x2F;ambul...</a>

I have a bridge to sell you if you believe the <i>wealthy</i> pay anywhere near 43.92%

&gt; Lastly, we won’t allow ourselves to be audited without our knowledge by the IRS by using a cloud-based personal finance app that could be subpoenaed behind our backs if they continue pushing for new powers.<p><a href="https:&#x2F;&#x2F;www.simplybusiness.co.uk&#x2F;knowledge&#x2F;articles&#x2F;2020&#x2F;08&#x2F;can-hmrc-check-personal-bank-accounts&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.simplybusiness.co.uk&#x2F;knowledge&#x2F;articles&#x2F;2020&#x2F;08&#x2F;...</a> : under some circumstances HMRC can access your banking information without telling you.

&gt;We need the basics that deliver true equality, as I experienced growing up in the UK: free healthcare, good public schools, and good public transport. Maybe even ban the private options like they banned<p>To be fair.<p>You picked California. Chicago , NYC, DC and I&#x27;m sure one or two other American cities have functioning public transportation.<p>The other two issues will never ever be fixed. Tbh if your quality of life was so much better in the UK why&#x27;d give that up ?

Its pretty easy to mitigate taxes in California<p>works for other states too but the tax rates won’t be high enough for you to bother looking<p>If your plan is just earning a salary and saving then you’ll get taxed the highest, the government is literally telling you to do anything else. Risk is rewarded, transactional velocity within the economy is healthier for the economy than tax revenues and the government promotes this via the tax code.

One way to improve government services is to measure quality somehow like private corporations do. Then there is at least a number that can be optimized instead of just more or less spending. Subjectively as an expat Brit living in California I would say Medicare as provided by Kaiser Permanente is superior to my memories of the 1970s UK NHS.

Why did you move to California if you’re working on a B2C app?<p>A B2B play like, say, Zendesk, I can understand, but isn’t anywhere ok for a B2C app?

&quot;it’s become extremely obvious to me that this propaganda doesn’t address the actual problem, which is how the money is actually spent,&quot;<p>I think everyone will have a difference opinion on what is worth spend on.<p>There&#x27;s a part about $100k student debt. Doesn&#x27;t CA have some sort of reduced&#x2F;free public college?

One big difference, though, is in the US I believe you can file jointly if you are married and get roughly double the usual range for each tax bracket? That option isn&#x27;t available in the UK and must surely make a huge difference with high income households.

The fact we do not receive a simple pie chart from the government that shows exactly where every penny we pay in taxes goes is a criminal travesty.

Probably the last blog I&#x27;ll write end to end now that ChatGPT is out too.

&gt; We don’t need ... standing Army ...<p>And now we are at the point when one strong and courageous nation defending free world from neoHitler with sweat, tears and blood, while countries without adequate armies are trying to find weapons needed.

The key thing here is that Americans see all the stuff in the left hand column as “socialism”.<p>The author sees the relationship between the government providing all those services and a healthy functioning society. Americans do not… again, they see provision of community&#x2F;common good social services as socialism.<p>Americans don’t see a direct line relationship between “socialism” and tent cities of homeless (though it’s true there is also a drug problem there).<p>In short, all the stuff that many other social democracies see as core to functioning society, the Americans…. speaking generally…. don’t want.

Americans are so dominated psychologically by elite propaganda that they fail to realize that America has this unique tax return torture system designed to extort fees from the people that go to the tax return industrial complex and a portion of that money gets paid back is kickbacks and bribes and fees or whatever to the Congress people that Ensure that the Byzantine tax system never goes away and only gets more complicated every year.. no other Nation on Earth has this tax return torture system and extortion device systematically applied across society